The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has issued a detailed response to concerns raised by KPMG over Nigeria’s newly enacted tax laws, defending the reforms as deliberate, globally aligned policy choices rather than errors or omissions.
In a comprehensive statement released on behalf of the Presidential Fiscal Policy and Tax Reforms Committee, Oyedele acknowledged that some of KPMG’s observations were useful, particularly those related to implementation risks and clerical or cross-referencing matters.
However, he argued that the majority of the firm’s publication reflected a misunderstanding of policy intent, mischaracterisation of deliberate reforms, and the presentation of opinions and preferences as facts.
He outlined his arguments in the following bullet points:
“Disagreements Framed as Policy Choices”
Oyedele stressed that many issues described by KPMG as “errors” or “gaps” were, in reality, intentional policy decisions made to achieve the broader objectives of tax reform. He noted that while professional disagreement is legitimate, such differences should not be framed as defects in the law.
According to him, a more constructive engagement would have involved direct consultations, allowing for clarification and mutual learning, rather than public characterisation of policy preferences as technical flaws.
“Stock Market, Share Gains and Investor Confidence”
Addressing concerns that the taxation of share gains could trigger a stock market sell-off, Oyedele clarified that the tax on share disposals is not a flat 30 per cent. Instead, it ranges from zero to a maximum of 30 per cent, with a planned reduction to 25 per cent. He added that about 99 per cent of investors qualify for unconditional exemptions, while others can benefit through reinvestment provisions.
He pointed to the stock market’s record-high performance as evidence that investors understand the reforms and do not share fears of capital flight or instability.
“Transition Timing and Commencement Date”
Oyedele rejected the suggestion that the new tax laws should commence strictly at the start of an accounting year, such as January 1, 2026, describing it as a narrow view of complex transition realities. He explained that comprehensive tax reforms affect multiple assessment periods, audits, credits, deductions, and penalties, making a single commencement date impractical.
“Indirect Share Transfers and Global Standards”
On the taxation of indirect share transfers, Oyedele said the provision aligns with global best practices and Base Erosion and Profit Shifting (BEPS) initiatives. Its purpose, he explained, is to close long-standing loopholes exploited by multinational companies, not to undermine competitiveness or economic stability.
“VAT, Insurance Premiums and Statutory Interpretation”
Responding to concerns about VAT exemptions on insurance premiums, Oyedele said such exemptions are unnecessary because insurance premiums are not taxable supplies under Nigerian law. He also dismissed claims of ambiguity around the inclusion of “community” in the definition of taxable persons, noting that modern legislative drafting uses comprehensive definitions to avoid redundancy.
“Revenue Administration and Dividend Treatment”
Oyedele defended the structure and mandate of the Joint Revenue Board, explaining that its composition is intentionally revenue-focused and consistent with its advisory role. He also clarified distinctions in dividend treatment, stating that dividends from foreign companies cannot be franked for Nigerian tax purposes because no Nigerian withholding tax would have been deducted.
“Non-Resident Registration and Compliance”
He rejected the argument that non-residents subject to final withholding tax should automatically be exempt from registration, noting that tax filings serve broader regulatory and compliance purposes beyond revenue collection.
“Policy Proposals Rejected”
Oyedele criticised proposals that would exempt foreign insurers from taxes on Nigerian-written premiums, warning that such a move would disadvantage local firms. He also defended the disallowance of tax deductions linked to parallel-market foreign exchange transactions, describing it as a deliberate fiscal measure to support monetary policy and stabilise the naira.
Similarly, he said linking tax deductibility to VAT compliance is a necessary anti-avoidance tool that promotes fairness and voluntary compliance.
“Progressive Personal Income Tax”
On personal income tax, Oyedele argued that the top marginal rate of 25 per cent is neither oppressive nor uncompetitive. He noted that effective rates could be lower through pension contributions and compared Nigeria favourably with higher top rates in countries such as Ghana, South Africa, the United Kingdom, and the United States.
“Errors and Omissions Disputed”
Oyedele dismissed claims relating to the Police Trust Fund, noting that the law expired in June 2025, making repeal provisions unnecessary. He also clarified that small-company tax thresholds pre-date the new laws and should not be framed as inconsistencies.
“What KPMG Omitted”
The response faulted KPMG for failing to highlight major structural improvements in the reforms, including tax harmonisation, planned reductions in corporate tax rates, expanded VAT input credits, exemptions for low-income earners and small businesses, elimination of minimum turnover taxes, and enhanced incentives for priority sectors.
“Conclusion and Way Forward”
Oyedele concluded that the tax reforms were the product of extensive consultations, public hearings, and legislative scrutiny. While acknowledging that clerical issues may arise in any major overhaul, he described the reforms as a bold step toward a self-sustaining, competitive Nigerian economy.
He urged stakeholders to move from static criticism to dynamic engagement, emphasising that effective implementation will depend on administrative guidance, regulatory clarity, and continued collaboration between government and the private sector.
